--- title: "Texas franchise tax: Definition and Sources | Tax Glossary" description: "The Texas franchise tax is a state privilege tax on LLCs, corporations and other entities formed in or doing business in Texas, reported every year by May 15." url: https://wallacecpa.multisites.ai/glossary/texas-franchise-tax publisher: Wallace CPA phone: +1-877-682-1171 quote: https://wallacecpa.multisites.ai/contact --- Texas tax # Texas franchise tax The Texas franchise tax is a state privilege tax on LLCs, corporations and other entities formed in or doing business in Texas, reported every year by May 15. Texas has no personal income tax, but most entities still report to the Comptroller each year. The Comptroller calls the franchise tax a privilege tax on each taxable entity formed in Texas or doing business there. The annual report is due May 15, or the next business day if that date falls on a weekend or holiday. Many small entities owe no tax because their revenue is at or below the no tax due threshold. For reports due in 2026 and 2027, that threshold is $2,650,000. These entities still file. See the [no tax due report](https://wallacecpa.multisites.ai/glossary/no-tax-due-report) entry. The [Texas franchise tax guide](https://wallacecpa.multisites.ai/guides/texas-franchise-tax) has the steps, and a [limited liability company](https://wallacecpa.multisites.ai/glossary/limited-liability-company-llc) is a typical filer. [Wallace CPA can helpNew business formation](https://wallacecpa.multisites.ai/services/business-formation) ## Related terms - [No tax due report](https://wallacecpa.multisites.ai/glossary/no-tax-due-report) - [Limited liability company (LLC)](https://wallacecpa.multisites.ai/glossary/limited-liability-company-llc) - [Sales and use tax](https://wallacecpa.multisites.ai/glossary/sales-and-use-tax) - [S corporation](https://wallacecpa.multisites.ai/glossary/s-corporation) ## Sources 1. [Texas Comptroller: Franchise tax](https://comptroller.texas.gov/taxes/franchise/) ## Talk to Wallace CPA Call the Southlake office and say what you need: a return, an IRS letter, your books or a new business. Have the notice or last year's return nearby if you have one. [Call (877) 682-1171](tel:+1-877-682-1171)[Send a message](https://wallacecpa.multisites.ai/contact) 180 State Street, Suite 225, Southlake, TX 76092